The first cheque into an Australian company should come from an Australian fund, even when the company is being built in San Francisco. That conviction has run through Galileo Ventures since its first fund, and its second has now reached a $15 million first close toward a $30 million target.
Fund I has begun to make the case. Twenty-five companies backed in four years, an unaudited net TVPI of 1.8x that places it in the top decile to date, and more than $200 million of co-investment attracted into those companies, including from Andreessen Horowitz, Bessemer Venture Partners and Insight Partners. Andromeda, SyncTechnologies, Relevance AI and Tixel are among the investments that increased more than tenfold within three years.
Fund II keeps the focus on emerging companies at pre-seed and seed while adding reserves, so the strongest can be backed beyond the first cheque. That is an important evolution. AI is compressing the distance between an idea and a working product, and companies now arrive with real users and validation at a stage where a deck once carried much of the case. More can be built, faster and with less capital, but that expands the field without necessarily improving it. The judgement that matters is which companies are worth staying with.
Galileo's own partners make the same point from the other side. "If it's an AI company, then I shouldn't see a slide deck. We should be seeing the product," partner Julia French told Capital Brief. Partner James Alexander was careful not to read cheaper building as better building: "Just because everyone can now build widgets doesn't magically make all these widgets great. We saw it in blogging: everyone can blog, but that didn't make them all great."
The fund has made its first investment, into brain interface company Fluent BCI. Initial cheques will run from $250,000 to $500,000 across a target of about 30 companies, with roughly 40 per cent allocated to Victoria-domiciled companies under the Innovation Victoria agreement. The team works across Melbourne, Sydney and San Francisco.
Artesian is one of the fund's backers, alongside cornerstone investor Innovation Victoria and others across Australia, New Zealand, Singapore and the United States. Alongside that investment we provide the fund administration beneath Galileo. The strategy and the investment decisions are theirs. Licensing, compliance, fund accounting and reporting run on our infrastructure, which gives an independent manager an institutional backbone without requiring its investment team to become a back-office business.
Congratulations to James Alexander, Hugh Stephens and Julia French. The raise was first reported by Bronwen Clune for Capital Brief, which is the source of the two quotations above. Fund I performance figures are unaudited.